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PM Modi had announced his vision to set up 100 smart cities across the country soon after his government was sworn into power mid 2014. Since then a race has been on among cities to land on the list that the ministry of urban development is compiling. The 100 smart cities mission intends to promote adoption of smart solutions for efficient use of available assets, resources and infrastructure.

Basically, a ‘smart city’ is a city equipped with basic infrastructure to give a decent quality of life, a clean and sustainable environment through application of some smart solutions.

The 14th Finance Commission, headed by former RBI Governor Y.V. Reddy, has recommended a 10 per cent jump in the devolution of tax revenues to States to 42 per cent, in keeping with Prime Minister Narendra Modi’s plans for greater flexibility to States. The total devolution to States will rise to 45 per cent of Union tax revenues in 2015-16.

In a letter to all Chief Ministers, the Prime Minister said the increase in resources given to States will give them the required freedom to tailor make development schemes to suit their needs.

The higher tax share to states would also have a significant impact on the Centre’s revenue and expenditure projections and the fiscal consolidation roadmap to be presented in the Union Budget 2015-16 on February 28.

The Commission has also recommended ₹2.87 lakh crore as grants to local bodies, using criteria of population and land area that would be divided into a basic grant and a performance grant. While panchayats would be given ₹2 lakh crore in grants, municipalities would receive ₹87,143 crore.

Though it did not award any special dispensation to debt-ridden States, the Commission has provided ₹1.94 lakh crore as a post devolution revenue deficit grant. This would help wipe out the revenue deficit of States like Kerala, West Bengal, Himachal Pradesh and Andhra Pradesh.

The Commission has also suggested that the government should set up a GST compensation fund to pay States for revenue losses once the goods and services tax is implemented. The compensation should be given to States for five years, with 100 per cent compensation being paid in the first, second and third years, and 75 per cent and 50 per cent compensation in fourth and fifth year, respectively.

The Union Government has replaced Planning Commission with a new institution named NITI Aayog (National Institution for Transforming India). The institution will serve as ‘Think Tank’ of the Government-a directional and policy dynamo. NITI Aayog will provide Governments at the central and state levels with relevant strategic and technical advice across the spectrum of key elements of policy, this includes matters of national and international import on the economic front, dissemination of best practices from within the country as well as from other nations, the infusion of new policy ideas and specific issue-based support.

The Goods and Services Tax (GST) Bill was tabled in the Lok Sabha on 19 October 2014. This Bill has faced stringent opposition from states in the past, the main reason why the bill couldn’t be passed by the previous Congress government.

The Bill seeks to rationalise state and central indirect taxes into a harmonised tax structure. Currently, companies pay multiple taxes at the state and central levels, which raises the prices of their products, making them less competitive compared with imports from China and other low-cost locations. The hassle and time wasted in filing myriad taxes also deters entrepreneurs and foreign companies from investing in India.

Aiming to leverage technology to provide cost-effective and innovative solutions, the government is planning to equip India Post to handle not only savings and insurance services, but also payments and data registration.

With the world’s largest postal network, India Post has about 1.55 lakh post offices spread across the country. On an average, a post office serves an area of 21.21 sq km and a population of 7,175 people.

The government is planning to utilise the huge resources at the disposal of India Post to provide cost-effective and innovative solutions to the citizens like financial services using digital connectivity, a source said.

The ₹113,000-crore ‘e-kranti’ project of the Narendra Modi government’s ‘Digital India’ initiative is the world’s most ambitious broadband project that seeks to provide digital access to all citizens, from the rural and elderly to the poor. The ‘Digital India’ blueprint revolves round ‘nine pillars’ — broadband highway, e-governance, electronics manufacturing leading to ‘zero import’, universal phone access, electronic delivery of services, jobs, rural internet, information for all and ‘early harvest’ programmes.

The aim is to move governance online, and for that to happen, bridging the so-called digital divide is essential. The government aims to expand its rural internet coverage to 250,000 villages by 2017, from the existing 130,000. In two years, 150,000 post offices will be transformed into multi-utility centres (providing a range of government services, banking for instance, and not just postal services). Some 250,000 government schools will get broadband and free WiFi and all schoolbooks will have e-versions.

The digital drive is also integral to the government’s plan to create 100 smart cities. Under the plan, all cities with a population of more than a million will get public WiFi hotspots. All government communication will move to a universal secure email client.